State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 381, which of the following is NOT required to be specified in an insurance policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Section 381 lists what a California policy must specify: the parties, the property or life insured, the interest of the insured, the risks insured against, the period of coverage, and the premium or the basis for computing it. A financial rating is a solvency or marketing indicator published by rating agencies; it is not one of the statutory required elements, so its absence does not make a policy defective.
Why the other options are wrong
- A) The parties to the contract, meaning the insurer and the insured, are required by Section 381.
- B) The property or life insured must be specified so that the subject of the contract is clear.
- C) The period of coverage must be stated because insurance runs for a defined term.
Memory hook
Six required specs, and a rating grade is not one.